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ARTICLE · 10 AUGUST 2022

ASIC begins enforcement of design and distribution obligations

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DDO regime impacts issuers & distributors of in-scope financial products. Analysis of reasons that ASIC is making Stop Orders.

AustraliaFinance and Banking
Felicity Healy
Felicity Healy
Steven Rice
Steven Rice
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ASIC has announced its first round of enforcement action under the 'design and distribution' (DDO) provisions of the Corporations Act 2001 (Cth) (Corporations Act) issuing a number of 'stop orders' in respect of the issue and distribution of financial products.

Possible DDO enforcement action was foreshadowed by ASIC earlier in 2022, and, given the broad remedies available to ASIC, we consider this to be the first of many similar enforcement actions in the years ahead.

We analyse below ASIC's reasons for making the stop orders. Having regard to these reasons, we recommend product issuers and distributors re-focus on DDO systems and processes to manage the risk of non-compliance with the DDO regime requirements.

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